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Traditional economy

Traditionally nomadic, Turkmen were herders moving from one grazing site to another. Animals were the source of their food, clothing, materials for tents, and other necessities. Those tribes living near the sea were able to supplement their diets with fish. Though the tribes occasionally bartered with each other, they formed no organized economic system.

Some tribes became more sedentary as they settled around the fertile oases or in the foothills, where rivers provided water for cultivating crops. This access to water allowed other basic industries and services to develop, including pottery and shopkeeping.

Around 500 B.C.E., the Turkmen cities were part of the larger economy that flourished along the Silk Road. The majority of the people still depended on their traditional nomadic ways. Economic exchanges were confined mostly within tribes or clans. This system remained largely intact until the 20th century.

The Russians sought to change the entire structure of the nation, investing in huge collective farms and a few state-owned factories. Many nomads were forced to work on these collectives or to move to the cities and work in the factories. Most farming focused on cotton, which was shipped to Moscow. When oil and gas were discovered, the Russians built pipelines to transport the resources to other parts of the Soviet Union. But few of the revenues from agriculture or oil and gas stayed in Turkmenistan, leaving it the poorest of all the Soviet republics. The demise of the Soviet Union was less disruptive to the Turkmen economy because of its heavy reliance on agriculture.